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Business Execs Still Flying But Fewer Frills

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Employers are asking their executives to fly more but with smaller budgets, a survey of aviation professionals has found.

Aviation consultancy Ascend's 2012 survey, which polled 624 frequent travelers in Europe and North America, suggests companies expect an average 1.5 percent increase in flights against an estimated 1 percent travel budget increase.

The survey tallies with data from Carlson Wagonlit Travel, who manage travel for corporate clients. Their 2013 forecasts show that fares are expected to rise globally throughout the rest of 2012 and into 2013, with travel budgets continue to be squeezed.

This means, thinks Ascend's chief economist Peter Morris, that travel suppliers that can provide good value without loss of business functionality will do well.

"Unlike some other business budget areas, we are not seeing overall cuts which means respondents appreciate the value and necessity of business travel by air in a global marketplace."

Of the travelers in the Ascend survey, just 61 percent travel by either business or first class on long-haul journeys. Economy and premium economy class is slowly filling up with suited passengers; the latest forecasts from the International Air Transport Association (IATA) show a 3.5 percent year-on-year fall in July for premium-class travel within Europe.

YES TO NO-FRILLS

Low-cost carriers, who don't just offer cheap fares, but prime airport destinations and frequencies, are also enjoying the benefits of reduced travel budgets.

Europe's second-largest budget carrier easyJet says that around 18 percent of their passengers are now traveling on business, and this is only set to increase. Spokesperson Anna Knowles says that over the past year, the airline has completed a number of corporate deals, and most recently a deal with the UK Houses of Parliament.

But even budget airlines cannot rest on their laurels. Morris argues that low-cost carriers must concentrate on providing a range of services, products, and flexibility. "It is not enough to say 'that is the price, take it or leave it' - because it appears that some customers will leave it."

And managed business travelers can access competitive rates from their travel provider, which have been negotiated with legacy carriers.

Nigel Turner, a Carlson Wagonlit director, says that though many companies use low-cost carriers, they are not seeing a major shift to these airlines, "as schedule, airport location and total trip cost including all fees are key to any business travel decision making process."

TECHNICAL POSITIVES

Forty-four percent of respondents thought airport check-in processes were the most improved aspect of corporate travel, with booking technology given the thumbs-up by nearly three quarters of respondents.

Airports investment in IT continues apace. In a recent study by air transport technology specialist SITA, more than half of all airports said they expect IT spend to increase in 2012, while it will remain stable for another third.

Passengers' appreciation of online processes was in marked contrast to offline elements: Customer service and security processes were both cited by Ascend as major flaws in the travel experience.

(Reuters)

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